The arrival of spring means yet another round in the national debate over executive compensation. Soon the business press will trumpet answers to the questions it asks every year: Who were the highest paid CEOs? How many executives made more than a million dollars? Who received the biggest raises? Political figures, union leaders, and consumer […]
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The arrival of spring means yet another round in the national debate over executive compensation. Soon the business press will trumpet answers to the questions it asks every year: Who were the highest paid CEOs? How many executives made more than a million dollars? Who received the biggest raises? Political figures, union leaders, and consumer activists will issue now-familiar denunciations of executive salaries and urge that directors curb top-level pay in the interests of social equity and statesmanship.
A version of this article appeared in the May–June 1990 issue of Harvard Business Review.
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MJ Michael C. Jensen, the Jesse Isidor Straus Professor of Business Administration, Emeritus, at Harvard Business School in Boston, is the managing director of the organizational strategy practice of the Monitor Group, a collection of global professional services firms with headquarters in Cambridge, Massachusetts.
KM Kevin J. Murphy is an associate professor at the University of Rochester’s William E. Simon Graduate School of Business Administration. His earlier HBR article on executive compensation, “Top Executives Are Worth Every Nickel They Get,” appeared in the March–April 1986 issue.
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